I just learned that the very first article that I ever published is now available on line. (It might have been available on line for some time now, but I just learned about its availability this morning. Thanks Neil G.) This article, which appeared in the August 1979 edition of Reason, is co-authored with my great undergraduate mentor at Nicholls State University, Bill Field. Its title is “The Cost of Conscription.” And truth be told, most of this essay is written by Bill. He was kind enough to ask me, then still an undergraduate, to write this article with him. But whatever good qualities it has come exclusively from Bill.
I post it below the fold.
There is a great deal of disquieting talk in the United States these days about reverting to conscription of the nation’s youth. This conscription is to be used not only to fill the military ranks but also, under the dubious title of “national service,” to fill federal government jobs or jobs designated as desirable by the federal government.
Libertarians thought the battle against conscription had been won, but statists almost never give up on any possibility for increasing their power. Today, an alliance of conservatives (who want the military draft) and liberals (who want mandatory national service) has created a very real possibility that a proposal combining both could obtain the congressional votes necessary for passage.
Obviously, such a proposal is even more repulsive and immoral (if degrees of immorality are possible) than a proposal for a military draft alone. The technical skills of a philosopher are clearly not necessary in order to reject it on purely moral grounds. Our purpose here, however, is not to restate the moral arguments against this draft-national service proposal but rather to explain the economic fallacies involved. Even these provide ample reason for opposition to the proposal.
NO MONEY MAGIC
Those wishing to reinstitute the draft (mostly conservatives) mainly emphasize the enormous and exploding costs of military manpower. They argue that these costs make it much more difficult for the United States to finance all its needs for military hardware and technology. This difficulty, in turn, makes it more likely that the United States will eventually fall behind the Soviet Union in both areas. Obviously, with a draft, wage rates for military personnel could be lowered and outlays for manpower reduced. This is what conservatives mean by their claim that use of the draft would lower defense costs. Thus, they conclude that “the military problem” could be solved, or at least substantially alleviated, by a return to military conscription.
This argument seems to have a kind of superficial validity, but it falls apart completely when subjected to economic analysis. Contrary to the claim of the conservatives, the reinstitution of the draft would not result in the true cost of military personnel being magically lowered from the cost of the present all-volunteer force. The true economic cost of having an individual in the military is not the wage he is paid but rather the goods and services he could have produced in the private economy—the opportunity cost, as it is called by economists.
The wage rate an individual earns in the private economy is a minimum indication of his productivity there. No businessman who expects to continue in operation can afford to pay a worker more than the value of his output. With an all-volunteer army, individuals must be paid at least what they could have earned in the private economy to induce them to volunteer. Thus, the taxpayer has to pay the true cost of having these individuals in the military.
The result of the use of the draft to obtain military personnel would be that the economic burden of the military, rather than being reduced, would simply be shifted from the general taxpayer onto the shoulders of the conscripted individuals. A tax break would be given to civilians at the expense of the draftees, who would pay a tax in the form of forgone wages and benefits. Obviously, this would reduce the size of the reported military budget, but it would not reduce the cost of the military to the society as a whole.
But the situation is actually much worse than this. The true economic cost to society of armed forces obtained through conscription would inevitably be much greater than the cost of an all-volunteer force, for at least two reasons.
First, under an all-volunteer system, individuals with the poorest alternatives (the lowest opportunity cost) tend to be the ones who volunteer. Thus, the nation obtains military manpower at the least cost in sacrificed private output. With a draft, individuals would be forced by a set of arbitrary rules to join the military. Many of these individuals would have very high opportunity costs (some would have particular skills, either latent or already developed, in athletics, art, business, science, etc.). Consequently, the cost of obtaining the same amount of military personnel, in terms of lost private-sector output, would inevitably be much higher.
Another factor that would increase economic costs of the military if a draft were used to obtain personnel is the misuse of resources that would occur within the military. Since under a draft the explicit cost of manpower would be artificially lowered, those officers making decisions about how various tasks should be performed would think of manpower as a relatively cheap resource. This would lead to the overuse of manpower relative to machinery, as draftees would be used to perform all sorts of menial tasks. Consequently, more draftees would be needed, each costing the private economy much more than his military pay and each suffering the loss in the form of reduced wages.
The same argument can be extended to the decisionmaking process concerning appropriate battlefield techniques. Military commanders must choose among an almost infinite number of possible combinations of planes, tanks, ships, other equipment, and manpower. Inevitably, if the cost of one of these items is held down artificially, military decisionmakers will tend to overuse that item. Thus, with a draft, all planning for potential wars would tend to involve an overuse of manpower, and in an actual war inflated casualties would result. Notice that we are not assigning evil motives to anyone but rather simply pointing out that relative prices inevitably affect decisions.
In short, then, the draft, far from reducing the true economic cost of military operations, would only serve to substantially inflate that cost while imposing large, inequitable burdens on the unfortunate draftees. Those who wish to reinstitute the draft will find no support for their argument in economic analysis.
Turning now to the “national service” aspect of the current proposal (that portion appealing to liberals), we find that it is even more disastrous in economic terms than is the draft aspect. The implied assumption of the “national service” proposal is that every individual should have to do something for other Americans during at least some short period of his life and that only those individuals who work for the federal government or in jobs designated as desirable by the federal government do anything of benefit to their fellow citizens.
Those who accept this argument are obviously blind to the process that enabled the great wealth of the United States today to be created—the free market. They are obviously blind to the beneficial social effects of voluntary individual actions. Their argument implies that individuals working on a farm, in a factory, in a fast-food restaurant, or in any other form of private employment are performing no services of value to their fellow citizens.
As totally fallacious as that argument obviously is, think of the other side of it for a minute. According to the advocates of “national service,” if we take millions of young Americans and force them to become federal government employees or to accept those jobs designated for them by the federal government, they are somehow to become highly productive individuals providing huge benefits to their fellow Americans. After all, if the Department of Energy just had another 20,000 employees, especially 18- to 24-year-olds with high school diplomas, just think how much more efficient it would be and what benefits it could offer Americans!
The economic fallacies here are so obvious that the temptation is to simply ridicule the proposal. Unfortunately and unbelievably, many politicians and citizens are taking the proposal quite seriously. Thus, it is essential that the economic arguments against compulsory national service be spelled out clearly.
THE EFFICIENT HAND
These arguments all revolve around the central point that the “invisible hand” of the free market is a more efficient allocator of resources than the “visible hand” of government. This one conclusion stands out unmistakably in even the most cursory study of economics. Whether you approach economics from theoretical, historical, or empirical perspectives, it is impossible to reach any conclusion but that the market almost always works and government planning almost never works. Different approaches to economics may involve different methods of reaching it, but the conclusion is crystal-clear. And why is the “invisible hand” superior to the “visible hand”?
First, as so eloquently explained time after time over the last 50 years by F.A. Hayek, there is no way for government planners to obtain all the information necessary to run the entire economy. The government cannot come close to gathering and analyzing all the relevant specific knowledge needed to enable it to act as an efficient allocator of human resources. With respect to compulsory national service, it would be impossible for government to figure out the most productive use of millions of young people, especially since they would all differ in skills and interests.
Second, even if the information problem could be solved, James Buchanan and other economists of the “public choice” school have pointed out that it is out of touch with reality to think that government decisionmakers are even concerned with taking whatever actions will most benefit all individuals in the United States. Those involved in government decisionmaking—whether they are politicians, bureaucrats, or special-interest groups—act in their own self-interest just as individuals in the private economy do. The traditional distinction between a selfish private sector and a selfless public sector is totally fallacious.
Decisions about what to do with all these “national service” workers would be made on the basis of the self-interest of the decisionmakers. Politicians would want the workers used in such a way as to maximize the number of votes they could obtain from the services provided. Bureaucrats would want the workers used to increase the size and power of their particular agencies. Special-interest groups would want their own pet projects carried out. How could anyone believe that such a struggle for advantage could end up making efficient use of national service workers?
Other arguments could be marshaled against the “visible hand.” We could look at past experience with programs creating government jobs and how they tend to become simply make-work projects. We could talk about how difficult it is to get rid of such programs once they are established, even if they were originally supposed to be temporary in nature. We could talk about specific cases of failure of the “visible hand” such as the postal service, public schools, urban renewal, and zoning. But surely the two arguments already discussed in some detail are sufficient to explain why government planning is inherently inefficient and “national service” would inevitably be disastrous.
There is only one conclusion to be drawn from economic analysis—any form of conscription is economically unwarranted and undesirable. The economic effects that necessarily accompany the use of conscription, whether for military manpower or national service, are undeniably harmful, rather than beneficial. The economic evidence is overwhelming—individual choice is much more efficient than government compulsion.
Of course, those who advocate conscription do not draw only from economics. Arguments based on morality and patriotism also appeal to many Americans. Economic arguments can be used to clear up some of the misunderstandings that make conscription seem attractive, but clearly the moral arguments must be attacked directly. The basic immorality of force and the absurdity of the idea that patriotism can be encouraged by the use of conscription must be emphasized again and again. In this case as in others, libertarians must continually restate the central point that individual liberty not only yields the most efficient economic results but also is the only truly moral system.
William Field is an associate professor of economics at Nicholls State University in Lousiana; Donald Boudreaux, an undergraduate economics major at Nicholls.